Snapshot - 03 February 2026
Gas and power sold off sharply as two late-January supports fell away at once. Weather models flipped decisively milder for the second week of February, unwinding the cold risk premium that had driven a volatile rally into contract expiry, while US–Iran de-escalation removed a layer of geopolitical support. NBP Mar-26 fell from the mid-90s to the low-80s p/therm on the day, with further weakness early today, and TTF tracked lower. Power followed gas across the curve. Carbon diverged, firming modestly after last week’s sell-off.
Gas weakness was concentrated at the front. Prompt and near-curve contracts repriced aggressively as forecasts shifted from 5°C below normal to near-seasonal conditions, materially reducing expected heating demand and storage draw rates. The physical picture remains adequate in the near term. Norwegian nominations are steady in the mid-340 mcm per day range, the UK system opened long, LNG send-out is healthy, and IUK exports have increased on arbitrage. Further out, losses were smaller. Summer-26 and Winter-26 eased but retained a floor, reflecting the structural deficit in EU storage, now around 40–41 per cent and the weakest seasonal level since 2022. That deficit continues to anchor injection-season pricing even as prompt risk unwinds.
Power tracked gas lower with conviction at the prompt. UK day-ahead baseload dropped into the low-£80s per MWh as wind output ran above seasonal norms and gas-for-power fell sharply. Near-curve contracts saw the largest declines, while seasonal power was more resilient on carbon support and known nuclear constraints. Clean spark spreads compressed as gas fell faster than carbon, reducing the premium for CCGT runs. Any sustained mild, windy pattern would test the downside further, but sensitivity to weather remains high.
Oil prices fell hard as Iran-related risk was priced out, reinforcing the bearish tone across energy. Carbon was the outlier. EUAs and UKAs edged higher on short-covering and positioning after the recent correction, decoupling from gas on the day. The near-term balance looks looser on weather and wind, but the low storage starting point keeps markets reactive to any renewed cold or supply disruption later in February.
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